Kishore v Kumari [2001] FJLawRp 77; [2001] 1 FLR 299 (31 August 2001)

JAIDEEP KISHORE v KRISHNA KUMARI & DIVEN BALRAM

High Court Civil Jurisdiction

27 March 2000, 31 August, 2001

HBC 0048/99L

Possession of State Lease – improvements on land – Defendants ignored Notice to Quit – whether Plaintiff obtained lease by actual fraud – whether the Plaintiff had knowledge of Defendants' occupational interest in the lease - Defendants did not exercise two options to purchase – Defendants did not show cause - Land transfer Act ss39, 40, 169(c) – State Lands Act s13(1)

The Plaintiff claims the Defendants have no lawful right to remain on the land, had no written consent from the Director of Lands to have any assignment in their name of any part of a State lease. The Defendants had earlier claimed possession before Agricultural Tribunal but withdrew their application upon cross examination. The Plaintiff claimed to be a bona fide purchaser for value, and denied any fraud or purchasing with knowledge of the Defendants' rights. The Court found the Defendants' evidence did not give rise to sufficient cause to make further investigation. The Court found that by a family arrangement, the former registered proprietor had granted an option to the first named Defendant's late husband to purchase, which option was not exercised before his death, and therefore extinguished by his death. The Plaintiff again extended an option to purchase to the Defendants, but again, was not pursued by the Defendants. Any claim they might have lay against the vendor and her son rather than the Plaintiff. Here, there was no evidence supporting an allegation of fraud and no consent from the Director of Lands for the Defendants' occupation or tenancy. The Court found the Defendants had failed to discharge the burden of showing cause why they should not give up possession.

Held–(1) Where the first named Defendant alleged fraudulent transfer of land to the Plaintiff, and alleged breach of rights but did not say what rights exactly she refers to, that the Plaintiff knew of, or how the Plaintiff knew of them, knowledge of fraud is insufficient unless established.

(2) By the Defendants' failure to exercise an option granted by the former registered proprietor to purchase, which was not exercised in his lifetime, and which option expired with his death, and their failure to pursue an option given by the Plaintiff to purchase, they could not claim an occupational interest to live on the land. There was thus no consent given for the Defendants' occupation, nor for any tenancy.

The Defendants failed to show cause why they should remain on the property. Possession to Plaintiff awarded, with costs.

Cases referred to in Judgment

Assets Company Ltd v Mere Roihi [1905] UKLawRpAC 11; [1905] AC 176
Darshan Singh v Puran Singh [1987] HBC 22/87 25 September 1987
Fels v Knowles 26 NZLR 608
Manjuwati Verma v Sharma Wati & Ors [1992] HBC 117/92L
Subaramani & Anor v Dharam Sheela & Ors (1982) 28 FLR 82
Sutton v O'Kane [1973] 2 NZLR 304
Ram Nandan v Shiu Datt [1984] ABU029/82 21 March 1984.

Adish K. Narayan and Janendra Sharma for the Plaintiff
Fazilat Munam for the Defendant

31 August, 2001

JUDGMENT

Gates, J

The Plaintiff seeks to gain possession of a State Lease of land at Korovuto, Ba. The land is in the Koronubu Sector and is severed by a sugar cane contract. He bought it in August 1999. On 30 November 1999 the Plaintiff served a summons to show cause to the Defendants pursuant to section 169 of the Land Transfer Act Cap. 131. Part XXIV of the Act allows a special jurisdiction to the court, to hear applications under an expeditious procedure. The Defendants carry the burden of establishing why they should not give up vacant possession to the Plaintiff [section 172] to the standard "if he to the satisfaction of the judge a right to the possession of the land." The Plaintiff filed 2 affidavits in the proceedings and the Defendants also 2. It is admitted, as well as established by evidence, that the Plaintiff is the last registered proprietor of the relevant land to qualify as a person who may issue such a summons [section 169(c)]. The Plaintiff was so registered on the title on 8 September 1999.

The Plaintiff exhibited a letter of consent from the Director of Lands consenting to the institution of these proceedings pursuant to section 13(1) of the State Lands Act Cap. 132.

On the land is a house, which is occupied by the Defendants. On 14 September 1999 the Plaintiff caused a Notice to Quit to be issued through his solicitors to the Defendants. The Defendants remained. The first named Defendant, in her affidavit sworn and filed on 20 January 2000, admits, she received the Notice. The Plaintiff says the Defendants have no lawful right to remain, moreover he says they have no written consent from the Director of Lands to have assignment in their name of any part of the State lease. The Plaintiff sets out various matters of inconvenience and loss resulting from his being kept out of his property.

The 1st Defendant alleges fraud on the part of the Plaintiff. She says he had actual notice of her occupational interest in the said lease. The Plaintiff had purchased the land from Ratnammal, the mother in law of the 1st Defendant, who the 1st Defendant accuses of "furtively and fraudulently" transferring the property to the Plaintiff. She said "...The Plaintiff at all times carried out an inspection of the subject property and knew of our rights and yet he decided to purchase the same". She did not say what rights exactly she refers to, that he knew of, or how he knew of them. The Plaintiff denies any fraud on his part. He says he is a bona fide purchaser for value. In his second affidavit, sworn and filed on 17 February 2000 he went on to say:

"Whilst the sale was in the process of being completed the second named Defendant had approached my father to purchase the property from me. I am informed by my father that my father, on my behalf, did tell the Second Defendant that I had incurred considerable expense since the grant of consent by the Director of Lands to the purchase. The Second Defendant had agreed to move out if he could not purchase. Indeed, the 2nd Defendant was told by my father that I would be looking at around $84,000.00. He did not come back."

As for the inspection visit, the Plaintiff said:

"I went to inspect the property once and was accompanied by Sundar Permal [1st Defendant's brother in law]. He informed me that some labourers were staying in the house illegally and that they would be leaving soon."

Fraud for the purposes of the Land Transfer Act has been defined by the Privy Council in Assets Company Ltd. v Mere Roihi [1905] UKLawRpAC 11; [1905] AC 176 at p 210 where it was said:

"...by fraud in these Acts is meant actual fraud, i.e. dishonesty of some sort, not what is called constructive or equitable fraud, an unfortunate expression and one very apt to mislead, but often used, for want of a better term, to denote transactions having consequences in equity similar to those which flow from fraud. Further, it appears to their Lordships that the fraud which must be proved in order to invalidate the title of a registered purchaser for value, whether he buys from a prior registered owner or from a person claiming under a title certified under the Native Land Acts, must be brought home to the person whose registered title is impeached or to his agents. Fraud by persons from whom he claims does not affect him unless knowledge of it is brought home to him or his agents. The mere fact that he might have found out fraud if he had been more vigilant, and had made further inquiries which he omitted to make, does not of itself prove fraud on his part. But if it be shewn that his suspicions were aroused, and that he abstained from making inquiries for fear of learning the truth, the case is very different, and fraud may be properly ascribed to him. A person who presents for registration a document which is forged or has been fraudulently or improperly obtained is not guilty of fraud if he honestly believes it to be a genuine document which can be properly acted upon."

The evidence provided by the Defendants does not give rise to sufficient cause to make further investigation. If they have any claim at all. It might lie against the vendor Ratnammal and her son Sundar Permal. The basic facts are not complicated, and they do not point to the Plaintiff's involvement in fraudulent activity, such that there is a credible challenge here to the paramountcy of the Plaintiff's title as the registered proprietor (sections 39, 40 Land Transfer Act) see Darshan Singh v Puran Singh (unreported) Court of Appeal, Fiji Civil App. No. 22 of 1987; 25th September 1987: where Mishra JA said (at p 4):

"There must in our view, be some evidence in support of the allegation indicating the need for fuller investigation which would make section 169 procedure unsatisfactory. In the present case the Appellant merely asserted that he had paid the money for the purchase of the property. This was denied by both Prasin Kuar and the Respondent. There was nothing whatsoever before the learned judge to suggest the existence of any evidence documentary or oral, that might possibly assist the Appellant in establishing fraud at a full trial. He was therefore, correct in treating the case as falling within the scope of section 8 of the Land Transfer Act and making an order for possession in favour of the Respondent."

In Manjuwati Verma v Shama Wati & Others (unreported) Lautoka High Court Civil Action No. 117/92 23 June 1992, Saunders J. said:

"The particulars reveal practically nothing. There are no details of any fraudulent acts. No claim that 2nd Defendants were aware of any of the correspondence or the undertaking or that any information was passed to them either by the Director of Lands or by Plaintiff or her solicitors."

In his first affidavit the Plaintiff stated his solicitors had notified him that the 1st Defendant had instituted proceedings before the Agricultural Tribunal in 1997. She had sought a declaration of tenancy. These proceedings were later withdrawn, and the matter terminated on 9th April 1998. The Plaintiff exhibited a letter from the Secretary to the Agricultural Tribunal which said "...after evidence of the Applicant [1st Defendant] and cross-examination other evidence, the Applicant withdrew the application."

The Plaintiff says the Defendants claim cannot succeed because there has been no consent to any dealing with the Lease. No evidence of any written consent is tendered by the Defendants. On the contrary, the Director of Lands has consented to the institution of these proceedings against the Defendants.

The 1st Defendant says the State Lease was part of an original farm of 23 acres which belonged to her late husband's father, one Murgan.

Murgan died in 1972. He left a will inter alia providing a life interest to his widow Ratnammal and on her death the estate was to be distributed to his 2 sons, Sundar Permal and Parsu Ram, the husband of the 1st Defendant. There appears to have been a subdivision some years prior to the Director of Lands' letter of 15 February 1974. This letter was tendered and referred to such a subdivision. The subdivision divided the original Farm No. 1280 into two lots. The letter says these were:

"Name	Area	Period	Rent
Murgan f/n Kodian	12 acres	21 years	$72.00 p.a.
Sundar Permal f/n Murgan	11 acres	10 years	$66.00 p.a.
Total area:	23 acres"

Murgan's remaining part was to be transferred to Ratnammal. It is said that a Deed of Family Arrangement was entered into on 4th June 1974 by which that part of the farm held by Ratnammal was to be held by her for her life and thereafter to go to Parsu Ram, the 1st Defendant's late husband. The Director of Lands' letter acknowledges the probate. Knowledge of these arrangements is firmly denied by the purchaser, the Plaintiff.

A first option to purchase was given to Parsu Ram by the Deed of Arrangement for the 11 acre lot [Clause 6]. Since he died on 20 June 1996, without the option being exercised the option would appear to have been extinguished by death. In any event, the Defendants were extended an option to buy by the Plaintiff but that was never pursued by the Defendants, nor is there evidence before me of an independent valuation being demanded or obtained. It would appear that by the deed of arrangement the 11 acre lot was to be registered in Ratnammal's name, and it is this lot that was sold to the Plaintiff.

In Fels v Knowles 26 NZLR 608 at p 620 it was said:

"The cardinal principle of the statute is that the register is everything and that except in case of actual fraud on the part of the person dealing with the registered proprietor such person, upon registration of the title under which he takes from the registered proprietor, has an indefeasible title against all the World."

This was cited with approval in Subaramani & Anor. v Dharam Sheela & 3 Others (unreported) FCA Civil App. No. 56/81 at p 4.

There is no evidence here of actual fraud on the part of the Plaintiff as the person dealing with the registered proprietor, Ratnammal. Knowledge of fraud, if it were fraud, must be established against the Plaintiff: Sutton v O'Kane [1973] 2 NZLR 304; compare generally Ram Nandan v Shiu Datt (unreported) FCA Civil App. No. 29 of 1982: 21 March 1984: where the Appellant said he recognised the Respondent's interest and when he succeeded his mother in title he would rectify the situation, but when he did succeed he failed to do so, which was held by the court to be a fraud at the date of procuring registration.

Since the option was never offered in Parsu Ram's lifetime, no further interest arose for the Defendants thereafter. I find there is an absence of sufficient evidence before the court to put this matter back for trial. There was no consent given for the Defendants' occupation, nor for any tenancy. I find the Defendants have not shown cause. The Plaintiff is entitled to possession, and costs, which I summarily assess at $300.

Application granted.

Marie Chan